diff --git a/libgnucash/engine/test/utest-Invoice.c b/libgnucash/engine/test/utest-Invoice.c
index 65fe389d1f..7a4af807c0 100644
--- a/libgnucash/engine/test/utest-Invoice.c
+++ b/libgnucash/engine/test/utest-Invoice.c
@@ -25,6 +25,7 @@
 #include <qof.h>
 #include <unittest-support.h>
 #include "../gncInvoice.h"
+#include "../Transaction.h"
 
 static const gchar *suitename = "/engine/gncInvoice";
 void test_suite_gncInvoice ( void );
@@ -48,7 +49,9 @@ typedef struct
     gnc_commodity *commodity;
 
     GncInvoice* invoice;
+    GncInvoice* invoice2;
     Transaction *trans;
+    Transaction *trans2;
 } Fixture;
 
 static void
@@ -66,16 +69,20 @@ setup( Fixture *fixture, gconstpointer pData )
 
     if (data->is_cust_doc)
     {
+        xaccAccountSetType (fixture->account2, ACCT_TYPE_RECEIVABLE);
         fixture->customer = gncCustomerCreate(fixture->book);
         gncOwnerInitCustomer(&fixture->owner, fixture->customer);
     }
     else
     {
+        xaccAccountSetType (fixture->account2, ACCT_TYPE_PAYABLE);
         fixture->vendor = gncVendorCreate(fixture->book);
         gncOwnerInitVendor(&fixture->owner, fixture->vendor);
     }
 
     fixture->invoice = gncInvoiceCreate(fixture->book);
+    fixture->invoice2 = NULL;
+    fixture->trans2 = NULL;
 }
 
 static void
@@ -143,12 +150,137 @@ setup_with_invoice( Fixture *fixture, gconstpointer pData )
     fixture->trans = gncInvoicePostToAccount(fixture->invoice, fixture->account2, ts1, ts2, "memo", TRUE, FALSE);
 }
 
+
+static void
+setup_with_invoice_and_payment (Fixture *fixture, gconstpointer pData)
+{
+    Split *split;
+    GNCLot *lot;
+    gnc_numeric amt = gnc_numeric_create (1000, 100);
+
+    /* 1. create invoice */
+    setup_with_invoice (fixture, pData);
+
+    /* 2. create payment */
+    fixture->trans2 = xaccMallocTransaction (fixture->book);
+    lot = gncInvoiceGetPostedLot (fixture->invoice);
+
+    xaccTransBeginEdit (fixture->trans2);
+    xaccTransSetCurrency (fixture->trans2, fixture->commodity);
+
+    /* This split will balance the invoice lot */
+    split = xaccMallocSplit (fixture->book);
+    xaccSplitSetParent (split, fixture->trans2);
+    xaccAccountBeginEdit (fixture->account2);
+    xaccSplitSetAccount (split, fixture->account2);
+    xaccSplitSetValue (split, gnc_numeric_neg (amt));
+    xaccSplitSetAmount (split, gnc_numeric_neg (amt));
+    xaccSplitSetLot (split, lot);
+
+    /* bank split will balance the transaction */
+    split = xaccMallocSplit (fixture->book);
+    xaccSplitSetParent (split, fixture->trans2);
+    xaccAccountBeginEdit (fixture->account);
+    xaccSplitSetAccount (split, fixture->account);
+    xaccSplitSetValue (split, amt);
+    xaccSplitSetAmount (split, amt);
+
+    xaccTransCommitEdit (fixture->trans2);
+    xaccAccountCommitEdit (fixture->account);
+    xaccAccountCommitEdit (fixture->account2);
+
+    gncInvoiceAutoApplyPayments (fixture->invoice);
+}
+
+static void
+setup_with_invoice_and_CN (Fixture *fixture, gconstpointer pData)
+{
+    const InvoiceData *data = (InvoiceData*) pData;
+
+    time64 ts1 = gnc_time(NULL);
+    time64 ts2 = ts1;
+    const char *desc = "Test description";
+    GncEntry *entry = NULL;
+    Split *split;
+    GNCLot *lot1, *lot2;
+    gnc_numeric amt = gnc_numeric_create (1000, 100);
+
+    setup (fixture, pData);
+
+    /* 1. invoice */
+    fixture->invoice = gncInvoiceCreate (fixture->book);
+    gncInvoiceSetCurrency (fixture->invoice, fixture->commodity);
+    gncInvoiceSetOwner (fixture->invoice, &fixture->owner);
+
+    entry = gncEntryCreate(fixture->book);
+    gncEntrySetDate (entry, ts1);
+    gncEntrySetDateEntered (entry, ts1);
+    gncEntrySetDescription (entry, desc);
+    gncEntrySetDocQuantity (entry, amt, FALSE);
+    gncEntrySetBillAccount (entry, fixture->account);
+    gncBillAddEntry (fixture->invoice, entry);
+
+    gncInvoicePostToAccount (fixture->invoice, fixture->account2, ts1, ts2, "memo", TRUE, FALSE);
+
+    /* 2. CN */
+    fixture->invoice2 = gncInvoiceCreate (fixture->book);
+    gncInvoiceSetCurrency (fixture->invoice2, fixture->commodity);
+    gncInvoiceSetOwner (fixture->invoice2, &fixture->owner);
+
+    entry = gncEntryCreate(fixture->book);
+    gncEntrySetDate (entry, ts1);
+    gncEntrySetDateEntered (entry, ts1);
+    gncEntrySetDescription (entry, desc);
+    gncEntrySetDocQuantity (entry, amt, TRUE);
+    gncEntrySetInvAccount(entry, fixture->account);
+    gncInvoiceAddEntry (fixture->invoice2, entry);
+
+    gncInvoicePostToAccount (fixture->invoice2, fixture->account2, ts1, ts2, "memo", TRUE, FALSE);
+
+    /* 3. now create the LL txn linking Invoice and CN */
+    lot1 = gncInvoiceGetPostedLot (fixture->invoice);
+    lot2 = gncInvoiceGetPostedLot (fixture->invoice2);
+    fixture->trans2 = xaccMallocTransaction (fixture->book);
+
+    xaccTransBeginEdit (fixture->trans2);
+    xaccTransSetCurrency (fixture->trans2, fixture->commodity);
+    xaccAccountBeginEdit (fixture->account2);
+
+    /* This split will balance the invoice */
+    split = xaccMallocSplit (fixture->book);
+    xaccSplitSetParent (split, fixture->trans2);
+    xaccSplitSetAccount (split, fixture->account2);
+    xaccSplitSetValue (split, gnc_numeric_neg (amt));
+    xaccSplitSetAmount (split, gnc_numeric_neg (amt));
+    xaccSplitSetLot (split, lot1);
+
+    /* This split will balance the CN*/
+    split = xaccMallocSplit (fixture->book);
+    xaccSplitSetParent (split, fixture->trans2);
+    xaccSplitSetAccount (split, fixture->account2);
+    xaccSplitSetValue (split, amt);
+    xaccSplitSetAmount (split, amt);
+    xaccSplitSetLot (split, lot2);
+
+    xaccTransCommitEdit (fixture->trans2);
+    xaccAccountCommitEdit (fixture->account2);
+}
+
 static void
 teardown_with_invoice( Fixture *fixture, gconstpointer pData )
 {
+    if (fixture->trans2)
+        xaccTransDestroy (fixture->trans2);
+
     gncInvoiceUnpost(fixture->invoice, TRUE);
     gncInvoiceRemoveEntries (fixture->invoice);
 
+    if (fixture->invoice2)
+    {
+        gncInvoiceUnpost(fixture->invoice2, TRUE);
+        gncInvoiceRemoveEntries (fixture->invoice2);
+    }
+
     teardown(fixture, pData);
 }
 
@@ -230,6 +362,25 @@ test_invoice_posted_trans ( Fixture *fixture, gconstpointer pData )
     }
 }
 
+// Testing for TXN_TYPE_INVOICE TXN_TYPE_PAYMENT are strictly testing functions
+// in Transaction.c, but require creating invoices, so, they are tested in
+// this file instead.
+static void
+test_xaccTransGetTxnTypeInvoice (Fixture *fixture, gconstpointer pData)
+{
+    g_assert_cmpint (TXN_TYPE_INVOICE, ==, xaccTransGetTxnType (fixture->trans));
+
+    g_assert_cmpint (TXN_TYPE_PAYMENT, ==, xaccTransGetTxnType (fixture->trans2));
+}
+
+
+static void
+test_xaccTransGetTxnTypeLink (Fixture *fixture, gconstpointer pData)
+{
+    g_assert_cmpint (TXN_TYPE_LINK, ==, xaccTransGetTxnType (fixture->trans2));
+}
+
+
 void
 test_suite_gncInvoice ( void )
 {
@@ -244,4 +395,8 @@ test_suite_gncInvoice ( void )
     GNC_TEST_ADD( suitename, "post trans - customer creditnote", Fixture, &pData, setup_with_invoice, test_invoice_posted_trans, teardown_with_invoice );
     pData.is_cn = FALSE;   // Customer invoice
     GNC_TEST_ADD( suitename, "post trans - customer invoice", Fixture, &pData, setup_with_invoice, test_invoice_posted_trans, teardown_with_invoice );
+
+    /* test txn type heuristics */
+    GNC_TEST_ADD( suitename, "tests txntype I & P", Fixture, &pData, setup_with_invoice_and_payment, test_xaccTransGetTxnTypeInvoice, teardown_with_invoice);
+    GNC_TEST_ADD( suitename, "tests txntype L", Fixture, &pData, setup_with_invoice_and_CN, test_xaccTransGetTxnTypeLink, teardown_with_invoice);
 }
diff --git a/libgnucash/engine/test/utest-Transaction.cpp b/libgnucash/engine/test/utest-Transaction.cpp
index c9bbf0f0c1..878b5b6bcd 100644
--- a/libgnucash/engine/test/utest-Transaction.cpp
+++ b/libgnucash/engine/test/utest-Transaction.cpp
@@ -1838,6 +1838,10 @@ test_xaccTransGetReadOnly (Fixture *fixture, gconstpointer pData)
 static void
 test_xaccTransGetTxnType (Fixture *fixture, gconstpointer pData)
 {
+    // note this will only test TXN_TYPE_NONE, because TxnType is derived
+    // from split data. Testing for TXN_TYPE_INVOICE TXN_TYPE_PAYMENT
+    // will require creating invoices, so, they are tested in
+    // utest-Invoice.c
     auto txn = fixture->txn;
     g_assert_cmpint (TXN_TYPE_NONE, ==, xaccTransGetTxnType(txn));
 }